The province over heat in real estate market in Canada is a cause for alarm as many measures are being tried to be put in place to ensure a control of the market especially the Toronto area where there had been an actualization of the average increment of the selling price percentage of homes to 27.7 per cent compared to the previous year. This and other soars in the markets has compelled the government to find ways of addressing the issue of the market.
- Tax Foreign Buyers: The Toronto Real Estate board is already avoiding this measure considering the claim that the foreign buyers are a positive force in the local housing markets and their data also shows that foreign buyers make up 4.9 per cent of annual transactions. The homes are mostly purchased as homes for family members, an investment to rent out or as homes. However, BMO economist Doug Porter welcomed the idea stating foreign buyers are a good place for Toronto to start.
- Restricting Access to Credit: Because of the low interest, it is easy to obtain a house and erecting of hurdles like shortening mortgage amortization periods. Increasing the 5 per cent down payment would make it difficult for housing insane Canadians and this would prevent some certain buyers from the market and prevent Canadians from being over leveraged.
- Taxing Vacant Homes: Taxing vacant homes is a good measure of forcing more supply into the Toronto market and also helps ease price gains. Vancouver which has the largest hosing market in Canada after Toronto, faced a similar problem. In January however, they implemented this tax when home owners were required to rent out houses for at least half of the year or face a percentage charge based on the property’s value though Toronto’s situation is not as bad as Vancouver which realized over 20,000 vacant or under used properties last year.
- Boost Housing Supply: The favored option of the real estate industry is to build more houses. They suggested that supply is the key to controlling the market. In the Toronto region, the composition of the housing issue is the real supply issue.